Is Tron failing in the DeFi game?

Image Source - modified

Yield farming and DeFi are the buzzwords nowadays. Crop rotation by the yield farmers to maximize yield across different protocols has become a defining blockchain activity. The tokens like Aave (LEND) and Compound (COMP) have rallied more than 200% recently. Compound has also become the most popular DeFi protocol by dethroning Maker. Total value locked in DeFi is approximate 2.62 billion USD now. The DeFi industry was approximately 500 million USD one year back. The industry has grown 424% within one year. The interesting part is that majority DeFi activity is taking place on Ethereum blockchain only. Even Bitcoin has arrived on Ethereum blockchain as Ethereum wrapped Bitcoin (WBTC). The game of DeFi is really happening and no player wants to be left out of this game.

Ethereum has scalability issue and the soaring gas fee provides an opportunity to the other blockchains to develop DeFi eco-system. A few projects on EOS blockchain are already experimenting with some yield farming protocols with a decent outcome. Tron also wants to jump onto the bandwagon. Justin Sun, the founder of the cryptocurrency platform Tron, recently announced Tron Foundation’s foray into DeFi space. JUST, rumoured to be named after Justin Sun, is a proposed decentralized lending platform. JST is the governance token of the JUST platform. The JST token was launched from Poloniex LaunchBase and sale ended in May 2020. JST is supposed to be the DeFi token of entire Tron eco-system.

Justin Sun Tweet

But everything is not moving well with Tron. Let us have a look at what has taken place recently:

USDT moving out of Tron

Tether announced swap of USDT from Tron to Ethereum very recently. This swap didn’t affect the amount of USDT in circulation. Only they burnt USDT (TRC20) and issued the same number of tokens on Ethereum. Such swaps keep on happening. USDT is available on Ethereum, Omni, EOS and Liquid also besides Tron. But the size of the swap was huge. It was a $300 million swap! USDT was definitely a dominant token on Tron and provided excellent liquidity. It is known that Justin has a special relation with Binance and his projects get good support from the world’s number one cryptocurrency exchange. Most probably Tron was paying a premium to Binance to keep sizable amount USDT on its blockchain. The deal may be over! Or it is possible that Binance wants to take benefit of yield farming using ERC20 tokens. Whatever! It is Tron’s big loss when they are entering into the lending and borrowing game of DeFi. It is a truth that USDT Ethereum token is in more demand than USDT Tron token due to yield farming.

Image Source - On-chain activity of USDT | DeFi activity of USDT present mainly on Ethereum (yellow)

Oikos saga

Oikos is a Tron community-driven project. It focuses on the creation of synthetic assets on Tron blockchain. The relation between Justin Sun and Oikos isn’t very clear. There was a strong rumour that Justin wanted Oikos to run an IEO (Initial Exchange Offerings) on his Poloniex exchange. The Oikos team refused that offer as they wanted to remain decentralized. But recently Justin has distanced himself from the project and warned people to be careful about the project. OKS (the governance token of Oikos) price went down after Justin’s tweet.

Justin Sun's statement about Oikos

Oikos is a very new project but they have 35K+ members in their telegram group. Justin had to face Oikos community backlash after that. Oikos governance token OKS is listed in a few exchanges now and it is trading at 3-5 times price of TRX. OKS can be obtained by swapping TRX via Oikos platform also. Oikos is the first proper DeFi platform on Tron blockchain without considering a few DEXs launched earlier. The project has an uncanny similarity with Synthetix platform. Basically they have copied the total user interface.

Image Source – Find out the differences between Oikos and Synthetix

Oikos team seems to be anonymous. The website displays cartooned images of the team member but no LinkedIn page links are available.

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Tron is controversy’s favourite child. Tron whitepaper wasn’t very original and it was accused of blatant plagiarism. Now, the DeFi eco-system is being developed as a clone of Ethereum ecosystem. Tron itself is a quasi-decentralized project as Justin Sun controls many aspects of Tron blockchain governance. In 2019, the company’s CTO and co-founder Lucien Chen stepped down from his role blaming that Tron had become totally centralized and lost the vision of the creation of a decentralized web. It’ll be interesting to see whether Justin becomes able to create decentralized finance (DeFi) or centralized finance (CeFi) on Tron blockchain. Let’s wait and watch.

Cheers!
[paragism]

Posted Using LeoFinance